Published on: April 22, 2022
I was reading a piece in the Boston Globe about how Gannett, in a self-described "bold" move, is cutting back on print editions and delivering the ones that are left via the US Mail. Which means that they won't be using paperboys anymore. As someone who worked both as a paperboy and a newspaper reporter for Gannett when I was (much) younger, I have some thoughts about how this reflects both a disconnection from community and a misuse of the word "bold."
Published on: April 22, 2022
From CNBC:
"Amazon is launching a $1 billion fund that will back companies 'of all stages' building supply chain, fulfillment and logistics technologies, the company announced Thursday.
"The Amazon Industrial Innovation Fund will focus on new technologies that will 'increase delivery speed and further improve the experience' of warehouse and logistics employees, Alex Ceballos Encarnacion, Amazon’s vice president of worldwide corporate development, wrote in a blog post.
"The fund is one subset of Amazon’s growing investment activity. The e-commerce giant in 2020 launched a $2 billion fund to invest in climate technologies, and it operates the Alexa Fund, which has made investments in speech-recognition technology, among other areas."
And, earlier this week, Amazon Web Services announced it "has committed more than $30 million to early stage startups led by Black, Latino, LGBTQIA+, and women founders as part of its new AWS Impact Accelerator. Over the three-year commitment, AWS will provide funding and guidance for a series of programs that will help these organizations build successful companies. Each qualifying startup receives up to $225,000 in cash and credits, extensive training, mentoring and technical guidance, as well as introductions to Amazon leaders and teams, networking opportunities with potential investors, and ongoing advisory support. Eligible startups can now apply to the first of these programs, the AWS Impact Accelerator for Black Founders."
The lesson here for every retailer, it seems to me, is that a little bit of everybody's budget should be reserved to invest in people and companies that you think have the potential to take you to new places and new levels. And it all should go to people and companies that are outside your comfort zone, that challenge all your assumptions about how to do business.
They won't all work. In fact, most of them might not offer any sort of ROI. But the ones that do will have the potential to be transformational.
Published on: April 22, 2022
Business Insider has a piece about how "H-E-B tightened its grip on the San Antonio area’s $8 billion grocery market last year as the coronavirus pandemic continued changing shopping habits.
"With 57 stores and about $4.2 billion in sales, the San Antonio-based company claimed 52.4 percent of the local market in 2021 … That’s up from 51 percent in 2020, when H-E-B’s slice of the market had dipped from 52.1 percent in 2019. The company regained that share last year, but its slice of the pie is still down from 56.1 percent in 2018."
The story notes that this is all without building any new stores.
But … Business Insider also points out that H-E-B is about to get new competition, as Kroger "plans to build a 'spoke facility' on the Northeast Side to store groceries and other items for delivery, which will work with a fulfillment center in Dallas.
"Kroger anticipates delivery service will be up and running by the end of this year. The company shuttered its 15 local stores in 1993 over a labor dispute and left the market."
I have no idea how much of a dent, if any, Kroger can put into H-E-B's market share.
But I would point out that there is another 40+ percent that may be in play, and if Kroger can carve off just a little of that, this could be a successful experiment.
Published on: April 22, 2022
Business Inside has a story about something that someone, somewhere finds to be controversial - a TikTok video suggesting that Trader Joe's is a chain primarily targeted at affluent people.
According to the story, the video "spurred discussion around Trader Joe's, a chain with around 530 stores and 10,000 workers, predominantly being for rich people. It's not the first time that debate over the grocery chain's perceived priciness has gone viral on TikTok, either.
"Insider previously found that the grocery chain draws in an up-and-coming crowd, with the typical shopper being a married, college-educated individual between 25 and 44 years of age earning over $80,000 and living in an urban area.
"In a 2007 report published in Pepperdine University's Graziadio Business Review, researchers found that Trader Joe's eschews national brands and instead focuses on selling a constantly changing mix of merchandise that 'are distinct from those sold in traditional supermarkets.' The result is a slew of 'high quality' products 'offered at low prices' within a relatively small store, compared with larger grocers or big-box competitors."
As you might be able to tell from the my characterization above, I'm more shocked that this is seen as news than I am by the idea that Trader Joe's attracts an educated, well-off customer base.
The key to Trader Joe's success, to my mind, is less about price than it is about differentiated products that appeal to people who know something about food. It is not as health-oriented as some might think, nor is it particularly good at fresh foods. The magic happens with the private label items that are high-quality and give the buyer a sense of being special because the products are positioned that way.
That's a really good combination. What is more mystifying is why more retailers don't try to find their own way to the same formula for success.
Published on: April 22, 2022
With brief, occasional, italicized and sometimes gratuitous commentary…
• From the Seattle Times:
"Workers at a second Seattle Starbucks location have joined the nationwide wave of unionization at the coffee giant — this time at one of the company’s flagship roastery locations.
"Employees at the Starbucks Reserve Roastery, located at Pike Street and Melrose Avenue in the Capitol Hill neighborhood, voted 38-27 to unionize with Workers United, an affiliate of the Service Employees International Union. About 100 workers were eligible to vote, and three ballots were challenged. The National Labor Relations Board announced the vote count Thursday.
"The hometown vote shows 'we’re really just hitting the gas with this movement,' said barista Liz Duran. Starbucks said in a statement Thursday, 'We will respect the process and will bargain in good faith. … We hope that the union does the same'."
Workers at more than 200 Starbucks stores in the US have voted to unionize; the company owns more than 8,000 in the US.
This one has to really stick in Howard Schultz's craw - the roastery format is his baby, but there are just six of them, and my sense is that they've never captured the public imagination in the way he hoped. As Shakespeare once wrote, "Those who are betrayed do feel the treason sharply." Though, to be fair, he added, "Yet the traitor stands in worse case of woe." We'll see how this all turns out.
Published on: April 22, 2022
Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…
• The United States now has had a total of 82,553,058 total cases of the Covid-19 coronavirus, resulting in 1,017,609 deaths and 80,355,389 reported recoveries.
Globally, there have been 507,854,253 total cases, with 6,236,480 resultant fatalities and 460,229,752 reported recoveries. (Source.)
• The Centers for Disease Control and Prevention (CDC) says that 77.4 percent of the total US population has received at least one dose of vaccine … 66 percent are fully vaccinated … and 45.5 percent of fully vaccinated people have received a vaccine booster dose - virtually unchanged over the past few days.
Published on: April 22, 2022
• The Associated Press reports that "Zipline, an American company that specializes in using autonomously flying drones to deliver medical supplies, has taken off in Japan.
"They’re flying, starting Thursday, across the tiny Goto Islands, off the western coast of Kyushu, in southwestern Japan, delivering to pharmacies and hospitals. Other parts of Japan may follow, including urban areas, although the biggest needs tend to be in isolated rural areas.
"Zipline, founded six years ago, already is in service in the U.S., where it has partnered with Walmart Inc. to deliver other products at the retail chain as well as drugs. It is also delivering medical goods in Ghana and Rwanda. Its takeoff in Japan is in partnership with Toyota Tsusho, a group company of Japan’s top automaker Toyota Motor Corp."
Published on: April 22, 2022
With brief, occasional, italicized and sometimes gratuitous commentary…
• From the Associated Press:
"Applications for unemployment benefits inched down last week as the total number of Americans collecting aid fell to its lowest level in more than 50 years.
"Jobless claims fell by 2,000 to 184,000 last week, the Labor Department said Thursday. The four-week average of claims, which levels out week-to-week volatility, rose by 4,500 to 177,250.
"About 1.42 million Americans were collecting traditional unemployment benefits in the week of April 9, the fewest since Feb. 21, 1970."
• USA Today reports that "a group of scientists at the Massachusetts Institute of Technology dug deep into the science by devising an Oreometer, a device designed to split the iconic Oreo cookie with a specific amount of force. The goal was to create a perfect split every single time: one side a clean cookie, the other side with all the filling."
One thing the scientists couldn't figure out, the story says, is "how to manipulate the perfect split Oreo split with equal cream on each side of the cookie."
But, they found, you can do it so "all the cream to wind up on one side. There's just one stipulation, the researchers found: The Oreo needs to be from a freshly opened pack and separated with a twisting motion … The scientists concluded the main factor was not the twisting of the cookie, but rather the 'adhesiveness' of the creme filling. The filling can be affected by a number of factors, including the way it's stored, packaged, manufactured and shipped, according to the study."
There's actually a name for this line of research: Oreology.
First of all, I don't have a degree from MIT, but I think I sort of knew this intuitively.
Second … I checked, and it costs more than $53,000 a year just in tuition to go to MIT. I know I sound like a parent here, but if I were spending that kind of money on my kid's education there, and this is what they had to show for it, I might be a tad peeved. On the other hand, if they're paying for it themselves … no, I'd still be sort of annoyed that in a world with all the problems that it has, really smart people are trying to figure out the best way to separate an Oreo.
Especially because the best way to eat an Oreo isn't to split it. You leave it intact, dunk it in cold milk, and then eat it.
• In Minnesota, the Star Tribune reports that "Best Buy has made it easier to get rid of an old television, computer or other unwanted electronic device with the debut of its e-waste pick-up service that would allow for items to be collected from customers' homes and then recycled.
"Starting this month, consumers can make a request online for pickup and recycling of electronics like major appliances, computer monitors, select fitness equipment and more through the Best Buy Standalone Haul-Away service.
"Best Buy will haul two large products along with an unlimited amount of select smaller products like laptops, cameras and cords per pickup. The Haul-Away service is available for $199.99 per pickup or $159.99 for customers who have Best Buy Totaltech membership."
This sounded like a pretty good idea - being a resource in addition to a source of product - until I saw the price tag, which just sounds a little excessive. At the very least, you'd think Best Buy would find a way to provide it for less money or even for free to its best customers.
Published on: April 22, 2022
Got a number of emails about our stories and commentary about Netflix's travails, which I think offer some lessons to retailers.
MNB reader Brian Hart wrote:
Your quote (and requote,) "Netflix is an expensive, swollen monster of a company that’s not very different from its competitors" is exactly why we canceled our subscription with the latest price hike. We had enough other services to select from, that we used at least as frequently, so why spend the money. It was an easy choice and to date we have not missed it.
But MNB reader Steve Anvik wrote:
Nice insight KC, and all valid thoughts … to a point. I subscribe to Netflix, and similarly to XM Sirius – Primarily to avoid commercials. That is far more value than free, or reduced costs to us. Push marketing is getting so intrusive/pervasive – that the pendulum will swing, and the benefit of ala carte non-ad services will survive/thrive again, IMHO.
From MNB reader Rich Heiland:
Interesting thoughts these past two days on Netflix and streaming in general. Two years ago we cut the cord on DISH and when we moved to Pennsylvania did not get any sort of cable. Currently we have YoutubeTV, regular Youtube, Netflix and Amazon Prime. Across those we have as much as we need. Do we miss some shows off Apple, HBO, SHO, all the other streaming outlets? Of course. But we also are still paying just a bit over half what we paid for DISH and would pay for cable in our area. So, we are not going to add to our menu. But, do we have “Loyalty” to any of these? Well, maybe Prime because of general shopping and deliveries, but otherwise, no. If one day I look at Netflix and say “this just isn’t any good any more,” I will switch. My loyalty is to what I really want to see and my pocketbook. Serve those two things and I’ll take a look. At some point there is a saturation point in what you can actually watch and see a cost-benefit return on.
One additional note here - Warner Bros. Discovery announced yesterday that it was shutting down the less-than-one-month-old CNN+ streaming service, concluding that to invest any more money in it would be fruitless, and that it would be too long and cost too much before achieving any reasonable ROI.
I still think that we'll see the company look to reduce its $55 billion in debt by selling off businesses - CNN and HBO among them. And I think that maybe Netflix will be in the market for an acquisition that will be a game-changer.
On another subject, from an MNB reader:
I totally agree that it’s bad when field associates feel disconnected from the home office and C-Suite, but can you imagine how challenging the”virus" can become when home office associates are disconnected from the home office? That’s life at one major retailer right now . . . Rite Aid. The company has completely shut down its corporate campus in Camp Hill, PA and the entire staff is working remotely forever. Many of the executives, who never bought into the idea of actually living in Central Pennsylvania, have returned to their families in places like Florida, California and the Carolinas. Rite Aid is creating a 20,000 sq. ft. (That’s all folks!) collaboration center in the trendy Philadelphia Navy Yard where associates and suppliers can gather, but there will be no offices or cubicles. Several other small collaboration centers are slated to be sprinkled strategically around the country. So while other companies are reconnecting by transitioning back to in-office or hybrid models, Rite Aid has taken the bold step of keeping people physically separated and virtually connected. It’s a bold move. Whether or not it helps or hampers the associate experience is TBD.
The other day we took note of a LendingTree study saying that "nearly 70% of buy now, pay later users admit to spending more than they would if they had to pay for everything upfront."
Prompting one MNB reader to write:
Please don’t support the latest version of “pay-day lending” – even vaguely, by saying its fertile ground. Typically those most vulnerable get hurt the most. I’m shocked you didn’t condemn this outright.
I take your point … but I'm not sure pay-day lending is the same as buy now, pay later. Though it is fair to say that both could be an enormous trap for consumers.
On the subject of drone deliveries, MNB reader Andy Casey wrote:
I have to be honest, I have tried to get my arms around this but just don’t see how drones make sense. Is it cheaper? No. More reliable? Clearly not. More convenient for customers? Not that I can see. What am I missing?
And from another reader:
People can be shut in(s) or time starved … but a drone delivery of a coffee (not to mention other items) is beyond my mind. Iced coffees start to melt/dilute, hot coffee cools. Wonder if a lot of deliveries were at 4:20? To quote Dr. Peter Venkman, “dogs and cats living together, mass hysteria” (for drones). What’s next?
I had an exchange the other day with an MNB reader who made an assumption about my politics, and I responded:
I am conservative about some things, liberal about others, and like to think that I actually relatively centrist and open-minded about most issues … But the only "true" thing I am is skeptical about anybody who thinks their way is the only logical and level-headed approach to anything.
When prompted by another reader, I wrote:
I missed an opportunity. I should've added what else I believe in … the soul, the small of a woman's back, the hanging curve ball, high fiber, good scotch, that the novels of Susan Sontag are self-indulgent, overrated crap. I believe Lee Harvey Oswald acted alone. I believe there ought to be a constitutional amendment outlawing Astroturf and the designated hitter. I believe in the sweet spot, soft-core pornography, opening your presents Christmas morning rather than Christmas Eve and I believe in long, slow, deep, soft, wet kisses that last three days.
But I don't believe in dogma. Nobody's.
One MNB reader responded:
Except for the dogma of Crash Davis.
Well, we all have to have our deities and role models.
Another MNB reader wrote:
Thanks, Crash. Here’s why players command such high dollar salaries:
"Know what the difference between hitting .250 and .300 is? It's 25 hits. 25 hits in 500 at bats is 50 points, okay? There's 6 months in a season, that's about 25 weeks. That means if you get just one extra flare a week - just one - a gorp... you get a ground ball, you get a ground ball with eyes... you get a dying quail, just one more dying quail a week... and you're in Yankee Stadium."
Finally, the other day there was an story in which some of the phraseology was reminiscent of the Serenity Prayer:
God grant me the serenity to accept the things I cannot change, courage to change the things I can, and the wisdom to know the difference.
But MNB reader Steve Burbridge didn't want to let it rest there:
I found this one day. A bit more up-to-date than the standard prayer we all know. I thought you might like it as it came from the Jesuits website and written by a Jesuit priest!
God, grant me the serenity
to accept the people I cannot change,
which is pretty much everyone,
since I’m clearly not you, God.
At least not the last time I checked.
And while you’re at it, God,
please give me the courage
to change what I need to change about myself,
which is frankly a lot, since, once again,
I’m not you, which means I’m not perfect.
It’s better for me to focus on changing myself
than to worry about changing other people,
who, as you’ll no doubt remember me saying,
I can’t change anyway.
Finally, give me the wisdom to just shut up
whenever I think that I’m clearly smarter
than everyone else in the room,
that no one knows what they’re talking about except me,
or that I alone have all the answers.
Basically, God,
grant me the wisdom
to remember that I’m not you.
Amen.
Published on: April 22, 2022
…will return.
In the meantime, have a great weekend, and I'll see you Monday.
Sláinte!!
